2:1 stock split & Rs 81,784 crore order book: This multibagger aerospace & defence stock hit new 52-week high after LCA IOC Contract increases to Rs 5,077.95 crore!

The stock has a PE of 36x, an ROE of 27.2 per cent and an ROCE of 30.6 per cent. 

Hindustan Aeronautics Ltd (HAL) informed that the company has signed an amendment to increase the value of the Light Combat Aircraft (LCA) Initial Operational Clearance (IOC) contract from Rs 2,700.87 crore to Rs 5,077.95 crore.

Additionally, a contract worth Rs 5,249.72 crore was signed for the production and supply of RD-33 jet engines for India's MiG-29 fighter jets. These engines, built under a technology transfer agreement with Russia, will ensure the continued operation of the MiG-29 fleet and allow for increased domestic production of parts for future maintenance and repair.

In a major boost to India's self-reliance in defence (Aatmanirbharta in Defence) and the Make-in-India initiative, the Ministry of Defence signed five contracts worth Rs 39,125.39 crore. These include new aero-engines for MiG-29 fighters from Hindustan Aeronautics Limited (HAL), Close-in Weapon Systems (CIWS) and High-Power Radars (HPR) from Larsen & Toubro (L&T), and BrahMos missiles and shipborne BrahMos systems from BrahMos Aerospace. These deals aim to improve domestic defence capabilities, reduce reliance on foreign equipment, and create jobs in the aerospace and defence sectors.

On Thursday, shares of Hindustan Aeronautics Ltd (HAL) gained 3.27 per cent and made a new 52-week high of Rs 3,334.45 per share from its previous closing of Rs 3,228.75. At the closing bell, shares of the company were trading at Rs 3,316.15 per share, up 2.71 per cent with a spurt in volume by more than 1.53 times on BSE.

Earlier, the company ex-date for the stock split stock split, dividing each existing Rs 10 equity share into two Rs 5 equity shares on September 28, 2023. Additionally, the company paid a final dividend of Rs 15 per share on August 24, 2023.

According to the Quarterly Results, the net sales increased by 9.54 per cent to Rs 5,635.7 crore and net profit increased by 1.1 per cent to Rs 1,232.3 crore in Q2FY24 compared to Q2FY23. The net sales increased by 9.37 per cent to Rs 26,927 crore and the net profit increased by 14.25 per cent to Rs 5,828 crore in FY23 compared to FY22. The company has a market cap of Rs 1,64,663 crore and has been maintaining a healthy dividend payout of 29.6 per cent.

The company's order book position is maintained at Rs 81,784 crore with the receipt of fresh manufacturing contracts, ROH and spare orders with continued budget allocation from the customer’s cash and the bank balance position has improved to Rs 20,306 crore.

The stock has a PE of 36x, an ROE of 27.2 per cent and an ROCE of 30.6 per cent. The stock gave multibagger returns of 150 per cent in just 1 year, 400 per cent in 2 years and a whopping 875 per cent in 5 years. Investors should keep an eye on this multibagger aerospace & defence stock.

Disclaimer: The article is for informational purposes only and not investment advice.